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* This is not a pre-approval or an offer of credit. The products shown above are not available in all areas. Financing will only be offered after review and approval of a fully completed application. Application approval may only be provided after a fully completed application has been submitted and reviewed for all underwriting criteria, including but not limited to: status of real property tax, mortgage payments, and bankruptcies.

Looking back, looking ahead: An interview with our CEO, Cisco DeVries

April 11, 2016

Renew Financial

Renew Financial has had a monumental year in 2015 between completing its first $50 million securitization for PACE bonds to acquiring AFC First and EcoCity Partners as part of your national expansion plans. Were you expecting this type of growth when you began the year? What have you been surprised about as the year unfolded?

The growth has been tremendous and very exciting, but it was not unexpected. We had been planning for the level of growth that we are now achieving for some time. It’s both exciting and relieving that we accomplished our goals. We had not planned on the acquisitions as we began 2015, but they came together very well and we’re excited about those new members of our family. The process and the integration has gone very well.

When I think back on the biggest surprises, I’m always surprised by how many people and how much work it takes to do what we are doing. It takes a lot of hard work to get this right. We have over 200 employees all across the country who are working on every component of how to grow and build a clean energy financing ecosystem. It’s a very complicated effort and involves people with expertise ranging from technology to finance to government relations.

I’m very appreciative of this amazing team that we’ve accomplished all of this, knowing how many ways we could have gotten it wrong. Hitting our goals for the year was harder than I thought it would be, and I’m more appreciative of what it took and even more excited for this current year.

ReHome, Renew Financial’s new fixed-rate consumer loan program, has already launched in New York and will be launching soon in Pennsylvania and many other states. How do you envision this market-based financing solution shaping the world of clean energy in 2016?

It is very clear that homeowners have different needs at different times–for contractors, for projects, and for financing. Our job at Renew Financial is to make sure that our contractor partners and homeowners have a product that works for them when they need it. The overall ballgame for us is to ensure that we can say we have a solution that solves a problem for a homeowner, whether they’re getting windows or a new AC system or a solar electric system. That means having a variety of financial products ready to go and that are easy to use.

A big part of 2015 was building the infrastructure, from an operations and technology perspective, that allows us to seamlessly offer multiple products to an individual consumer at the time he or she is looking at a project. We really view our unsecured loan products, like ReHome, as key components of our national growth and of our multi-product platform. Our unsecured loans can be offered in any state to any customer at any time, and that provides an essential glue that can hold the rest of all of the products together. The goal is to quickly reach a point where, no matter where a contractor or homeowner is in the country, they have at least one great option for financing — and hopefully more than one.

What specific home improvement products have been the most popular for homeowners and why?

The most popular products vary tremendously by state and even by region and area within state. One of the most popular projects we see in the Northeast over the last year has been the installation of higher efficiency heating and cooling system across all fuel types, as well as many conversions to natural gas heating systems. It’s much cleaner, offers a huge reduction in greenhouse gas emissions, and can save a lot of money. For homeowners, it’s a great win-win.

In California, solar continues to be a driving force. We saw in California the continuation of strong net metering rules that will ensure solar remains big market throughout the State for years to come. We were concerned towards the end of 2015 that we would see the federal tax credits and metering rules change in a way that would be less advantageous for solar, but by the end of 2015 and early into this year, both have resolved positively. We have seen and will continue to see a very strong solar market in California.

Nationwide, a big part of our bread and butter is helping people get extremely efficient heating and cooling systems. Around 3% of homeowners need to replace their heating and cooling system on an annual basis. We’ve done a great job of helping homeowners get a very efficient replacement from a qualified contractor which usually leads to a much better energy and financial outcome for them.

Renew Financial’s flagship PACE program in California, CaliforniaFIRST, has also experienced tremendous growth in 2015, both in terms of volume and in reach throughout the state. To what do you attribute this rapid growth and what’s ahead for the program in 2016?

People around the country don’t realize what it takes to grow a PACE program. We grew CaliforniaFIRST from about 25% of the state’s population to near 80% over the last year or so. That is 350 local governments on board with CaliforniaFIRST. In every one of them, we had to explain the program to staff and members of their city council, and there had to be a resolution passed by the elected body of that jurisdiction because they assess the property taxes by which the repayments are made. For each community, whether a community of 1,000 or 1 million people, the same level of work and engagement goes in. We have a great staff here that do that day in and day out.

For 2016, we want to get to 100% coverage of California. Then we want to take the same approach to the state of Florida and to grow our PACE financing territory there much the same way we did in California: city by city, city council member by city council member. It’s a lot of work, but at the end of 2016, to be able to look back and see the same type of growth we’ve seen in California would be a great success for Renew Financial, and I think we’ll do it.

PACE financing for commercial buildings is also expected to see tremendous growth. Why is PACE financing such a good option for commercial property owners?

If you look at the solar market in the U.S., there’s been tremendous growth in residential land utility-scale solar projects, but there has been a decline in both the last two years in the commercial sector. The reality is that most small and medium-sized commercial properties do not have access to credit or financing options for solar the way the rest of the market does. PACE solves that problem.

PACE takes a huge number of small and medium-sized commercial properties and makes them investment-grade properties. PACE allows for low-cost solar financing to become available and for those property owners to realize tremendous energy savings. The commercial sales process is complicated–we have had to do a lot of work to understand and improve our systems to provide seamless finance to the commercial space. In partnership with Solarcity and our other partners, we’ve begun to crack through.

I expect we’ll see a significant increase this year in our commercial PACE volume. It is a complicated place. The reality is there aren’t any other good financing options; we’re absolutely certain that commercial PACE will be a huge financing boom for the commercial market; it’s really just been a question of how long it takes to build out the infrastructure and find the right tools to open it up.

What has been the biggest challenge for growth in the past year, both in terms of the overall company and also its products?

It has certainly taken a lot of effort for commercial PACE to get this far. We’ve been at it for years and have been making good, slow progress and are starting to see significant inroads. We’ve had excellent success in attracting capital to the company in all kinds of ways. We’ve had success going to the securitization market; we’ve done investment-grade ABS transactions twice. Those things, while difficult, have gone very well.

I think the biggest challenges for growth are the hundreds and hundreds — sometimes thousands — of phone calls and emails we receive each day. Every one of these involves a homeowner or contractor who has unique issues and challenges related to his or her projects. How we interface with them, work with them, and learn from each of these is an ongoing effort. I periodically spend time listening to the call center’s calls to understand the conversation with the homeowners and find where the challenges lie. We relentlessly track how fast we are at answering the phones, resolving issues, and helping people get financing. There’s no end to the learning; it’s a huge amount of work.

If there’s any big, overall lesson learned, it’s that they aren’t any shortcuts here. You have to do the work and be ready for the unexpected. This is true for all of our projects. Every one of our customers is a property owner doing a project on their property–this is a big, emotional deal for them. Helping make the process easier, smoother, and helping solve problems for them is the whole ball game for us.

When companies grow as quickly as Renew Financial did this past year, maintaining the mission focus is critical. How have you and your teams addressed this challenge?

I started Renew Financial with a core belief that we could create enormous change, that we could really break open the opportunity for homeowners to save money and reduce their energy use. I believe that in doing so, we can offer big benefits for the climate and environment. One of my sayings here at the company is “go big or go home.” As the CEO of the company, I believe that, and I want all of my employees to believe that.

We ask a lot of our staff. The work we do is complicated and can be difficult, and we have very high standards. There are other opportunities and places to work, but we want to provide something that is worth our employees’ time. The work we do is about more than just cashing a paycheck, it’s about making change that we think needs to happen. We want to make a change on a societal scale. From starting the company to today, I’ve held true to that belief, and I think that’s a big part of why we are able to recruit so many talented individuals.

Every project we do is associated with the reduction of greenhouse gas emissions and improving our environment. Not only are we helping improve the environment with each project, we’re also helping a home or business save money, be more comfortable, or have healthier air. This is powerful stuff. It’s a unique opportunity to be at a business that allows us to do so much good while growing and scaling. I think people here embrace that. The mission is core to who we are, and every project we do furthers the mission.

Heading into 2016, I’m focused on reinforcing our mission. How do we make sure that every day our employees — and broader public — see the benefits we’re creating, the greenhouse gas emissions we’re saving, the pollutants we’re taking out of the atmosphere, the money we’re helping homeowners save? I want to make that more real with dashboards, information, and stories. It’s a large part of why people work here.

Renew Financial recently announced that it raised $70 million in growth capital, a huge milestone for the company. What does this capital mean for the company’s product expansion and overall growth?

We’ve raised over $120 million in capital to grow our company, to hire all these great people, and to to build out our infrastructure. What that says is that a lot of very smart people have recognized that what we’re doing has enormous value and that we’re on a remarkable growth trajectory. It’s a big confidence booster for the company.

What the capital means is that we get to accelerate our national expansion greatly. We have capital to grow our team, to expand to new states, and to put new products into the marketplace. That’s what 2016 is all about. 2015 was about proving we could do the financing at scale, that our products work, and that contractors and homeowners like using it. 2016 is about taking this experience that we’ve had in a few states across the country into many other states. It’s all about our growth and being able to serve more areas and more people.

What are the geographic bright spots for 2016?

We’ll continue to see growth in California with new products and territories. We’ll also be able to take that same model California to Florida with PACE and unsecured financing. We’ll see growth and expansion of our current efforts in New York. We will have new product offerings rolling out to network in Pennsylvania. We are already offering products in Kentucky and will continue to support product offerings in Ohio; we’ll also be adding Virginia to the mix. We’re already working in Maine, Illinois and Connecticut at scale.

Right now, the problem for us is that the number of opportunities we have to build, scale, and finance projects sometimes exceeds the capacity we have to roll out products. There’s so much opportunity it can be frustrating that we can’t do it all at once.

The first quarter is a good time to look back on the past year, as we have been doing today. Looking ahead to January 2017, what do you hope you will have accomplished in 2016? What’s your dream scenario?

My dream scenario for 2017 is honestly that I’m sitting in the same place I’m sitting today, that I’m working with this incredible group of people, and that we’ve grown in exactly the way that we predicted. This is the dream scenario for me. I’ve worked my whole life to have the opportunity to make change at this level and to work with such a great group of folks. If we tackle 2016 in the way that I believe we will, then I will be a very happy camper come January 2017. I’m not going to ask for more than that.